Ex­treme mea­sures not needed: Malaysia

The China Post - - WORLD BUSINESS -

Malaysia’s cen­tral bank said Thurs­day there is no need for “ex­treme mea­sures” such as peg­ging the cur­rency or cap­i­tal con­trols to halt a slide in the ring­git.

The Malaysian cur­rency has slumped by 20 per­cent since Sep- tem­ber last year and sank be­low four to the U.S. dol­lar on Wed­nes­day fol­low­ing main­land China’s sur­prise de­val­u­a­tion of the yuan. On Thurs­day, a U.S. dol­lar was buy­ing 4.02 ring­git.

Bank Ne­gara Malaysia gover­nor Zeti Akhtar Aziz said the volatil­ity in the ring­git was due to ex­ter­nal chal­lenges as well as “do­mes­tic is­sues that have gen­er­ated un­cer­tain­ties,” in ref­er­ence to con­tro­versy over debt laden state in­vest­ment fund 1MDB.

She said a flex­i­ble ex­change rate regime is cru­cial and that the fi­nan­cial sys­tem is strong enough to ab­sorb the shock.

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